Black Friday: what will happen to Europe and the world after the British vote

What happened?

British citizens voted to secede from the EU (the so-called Brexit). Around 8 am Moscow time the British newspaper The Guardian reported, citing news Agency Press Association that the supporters of the campaign for withdrawal from the EU is guaranteed to gained more than 50% of the vote in a national referendum. By 9 am you have processed all the ballots: skeptics win with a score of 51.9 per cent. For an exit from the European Union voted 17.4 million Britons, against just 16.1 million According to Reuters, at the same time, must begin an emergency meeting of heads of factions of the European Parliament.

As markets react?

Because of the institutional features of the British referendum reaction of traders and investors around the world has been uneven. The fact that this vote was not provided by the exit polls in the usual sense of the word. They played the role of poll of the sociological service YouGov conducted a referendum and promulgated at midnight (hereinafter time Moscow is ahead of London by two hours), simultaneously with the closing of polling stations. The experts found people who participated in their study two days earlier, and interviewed them after the fact voting. Summary of night of the survey showed that respondents were inclined to remain in the European Union: 52% against 48%. On this news the pound in a matter of minutes peaked in the beginning of 2016: the pound grew by 1% and briefly strengthened above $1,50.

The second feature of the referendum: it has not announced the preliminary results. During the night each of the 382 constituencies (not including Gibraltar, who also took part in the referendum) in turn reported outcome data from which gradually evolved the final painting. Of the major cities the first at the beginning of the third hour of the night announced the results of Newcastle and Sunderland in the North-East of England — in both cases, the support of the skeptics were above expectations, which led to a sharp drop in the pound.

Two hours later received another portion of data from sites in England and Wales, and the British currency has updated the record intraday fall by 6.3% to us $1,41. Soon came the information about the victory of Euro-optimists in a number of areas of Scotland, and the pound lifted to $1.45. Finally, around 5:30 in the morning it became known that a major industrial center of Sheffield voted to secede from the European Union, although all polls should not have been.

Then the markets started to collapse. Per hour pound fell to the lowest level since 1985, falling to $1,33 (intraday reduced). At the same time the barrel of Brent fell by 6%, began a significant decline in the already open markets of Asia, at the auctions premarket in Europe fell in price, and futures in the United States. The Japanese yen, a “safe haven” for investors, raised at the auction almost three-year highs, soaring above ¥100 per U.S. dollar. The Euro conversely fell to its lowest level since the beginning of March, breaking the mark at $1.1.

When 8:00, it became clear that the supporters of Brexit definitely gain more than 50% of the vote, investors have responded poorly to the news because he managed to win back the incident a few hours earlier. By 8:45 GMT, the pound remained stable at $1.34, the 10.6% below yesterday’s level.

What will be the further procedure?

Like the April referendum in the Netherlands, where the Dutch refused to support the Association of Ukraine with the EU, the decision of the British is not legally binding, but are regarded as politically binding”. In such formulations commented on the referendum on the British exit from the European Union in the official documents of the British Parliament. In other words, the referendum has no legal force, but has an unprecedented political weight.

The only way for a member country to leave the ranks of the EU — article 50 of the Lisbon Treaty. The government must notify the European Council of its intention, which then forms the methodological guidelines for the exit. According to article 218 (3) , the negotiations for the conditions of release should begin with the recommendations of the European Commission or of the head of European diplomacy (at the moment this position is held by Federica Mogherini). After that, the Council of Europe assigns a key negotiator with the EU.

When negotiating within the Council of Europe the representative of the withdrawing state (in fact, Prime Minister Cameron) to take part in the discussion has no right. A decision on the common position of the Council of Europe must make “qualified majority” — in the understanding of the Lisbon Treaty that 72% of States representing 65% of the EU population.

Negotiations should not take more than two years from the date of notice from London. After that, the UK’s membership of the EU automatically terminate (if the Council does not vote unanimously for the extension of the negotiations). But until then, the country will formally remain part of the Union. Thus, scheduled for 2017 presidency of the UK in the EU still takes place, and the British Parliament will retain their mandates.

However, the process at the EU level will be launched only if the government decides to apply to the Council in accordance with its internal constitutional requirements”. According to the British lawyer of Preiskel & Co, David Greene, this reference may mean that before starting the process pursuant to article 50 of London will require the consent of Parliament. In turn, among parliamentarians there is an absolute superiority of the opponents of Brexit: 454 MP out of 650, according to estimates by the BBC.